A bid bond (also called a tender bond) is issued to ensure that the exporter submits realistic bids under the tender process and to protect the importer for any loss that might occur if the exporter fails to sign the contract. A bid bond also assures the importer that the exporter will comply with the terms of the contract in the event that the tender is accepted. Bid bonds are usually issued for 2% to 5% of the tender amount.
A bid bond is often a condition for the consideration of a bid.
Sample bid bond (demand type)Sample bid bond (conditional type)